Question

can anyone help me with calculating ratios?

the problem ask to find the present value of $100,000 and the rate of interest of 6% for 10 years and 4% for 15 years.

Answer 1

Is it compound or simple?

Answer 2

present value of investment of 100,000 that will earn 6% for 1st 10 years and 4% for next 15 years
is that right?

Answer 3

The compounding period for both are annual

Answer 4

Amount: 100,000 compounding period annual and rate of interest 6% for 10 years
Amount- 70,000 compounding period annual and rate of interest is 4% for 15 years.

Answer 5

\[PV =\frac{ 100,000}{(1.06)^{10}}\]
\[PV =\frac{70,000}{(1.04)^{15}}\]

Answer 6

so are you multiplying 100,000 x 1.06 and 70000 x 1.04

Answer 7

no if you multiply that will give the future value

is the 100,000 the starting amount or final amount ?

Answer 8

100,000 is the starting amount

Answer 9

hmm then present value is 100,000

Answer 10

anyway, does the question specifically say find present value?
if so, then use the formulas i posted above

Answer 11

how do you calculate 100,000 x (1+6%)^-10

Answer 12

with a calculator...
first enter (1.06)^10
then take 100,000 and divide by prev answer